All about mortgages, interest rates and property in the United Kingdom.

Friday, August 24, 2012

This summer has seen the launch of the latest initiative to kick start lending in the mortgage market and wider economy.

The worries caused by the Eurozone crisis and the weakness of the economic recovery has lead to lenders facing increased costs in funding mortgages and other lending.

A lender can either borrow money from other lenders (the wholesale market) or they can borrow money from you and me as a savers (the retail market). This money is then lent out to people who want a mortgage or other loan.

Savers may have recently noticed that savings rates have increased, so this source of funding now costs lenders more to tap into. The cost of borrowing in the wholesale market has also increased.

The government through the Bank of England is offering to provide mortgage lenders extra funds at much reduced costs, so long as this money is then lent out again.

Over the summer, we have started to see the effects of this filter through into more mortgage products being available and lower interest rates being charged on new mortgages.

The extra cost to mortgage lenders of funding their mortgage lending has also lead to price increases. Only this week, we have seen Santander inform their customers who are currently on the Standard Variable Rate that the rate will increase by 0.5% from 4.24% to 4.74%.

For those people who reached the end of their fixed or tracker rate mortgage and who are now on the lenders Standard Variable rate, now could be the ideal time to review their mortgage to help save a few pounds.

Oak Tree Mortgages take an honest approach in helping you to decide whether changing your mortgage is a good move or not. For some people who want to move, re-committing to a new mortgage may not be the right thing to do. Some standard variable rate mortgages may also offer good value for money, so changing mortgage may not be right for everyone.

If you feel that you may be paying too much or you simply want to see what other options might be available, give as a call so we can help.

Call us today on 0121 733 8833

Your home may be repossessed if you do not keep up repayments on your mortgage

Oak Tree Mortgages are authorised and regulated by the Financial Services Authority

Friday, May 20, 2011

The average rent paid by tenants in England and Wales reached a record monthly high of £692 in April, according to a recent survey.

Locally, some are paying much higher rents than the average.

For many clients, we often find that arranging a mortgage over a longer term either matches or lowers their monthly housing cost compared to renting.

Of course, owning your own home brings responsibilities. But being a home owner also brings security.

Many landlords and what we refer to as “accidental landlords”. Maybe they couldn’t sell their home a couple of years ago and decided to rent their property out. Many of these “accidentals” have decided to sell recently or are planning to sell.

This type of landlord should make tenants nervous. You can only stay in the property for as long as your tenancy agreement allows and once this has expired, it’s up to your landlord whether they renew the contract.

Of course, renting for some people is absolutely the right thing to do. If your life is about to change, maybe a new job or a re-location is just around the corner; buying a home probably isn’t the right thing to do.

I wonder how many people have decided to rent because they either think or have been told they can’t get a mortgage. How many of those people only went to their own bank. And how many think you need a 25% deposit to get a mortgage?

As mortgage advisors, we have seen the mortgage market evolve in 2011.

Lending criteria is still very fragmented. A “no” from one lender does not necessarily mean a “no” from another. This is where a good broker can help in matching you to the right mortgage lender.

We can also report that we have a very good selection of mortgages available with a 10% deposit and even a mortgage requiring only a 5% deposit to help make the transition from tenant to home owner more realistic.

Call us today on 0121 733 8833

Your home may be repossessed if you do not keep up repayments on your mortgage

Oak Tree Mortgages are authorised and regulated by the Financial Services Authority

Friday, February 18, 2011

Look closely, and you will see green shoots in the garden and in the hedge rows. The days are getting longer. Spring is almost here!

With the optimism that spring heralds; thoughts turn to the year ahead, our hopes and aspirations.

Are you considering moving home in 2011, or possibly buying your first home? Maybe you have a mortgage and are worried that interest rates might increase?

According to the Council of Mortgage Lenders, mortgage brokers introduced 66% of all first-time buyer mortgages and over half of all other mortgages in 2010.

Time and time again we see clients who have previously made the mistake of believing loyalty to their bank or building society will save them money; we often prove that this is not the case.

For those looking to move or re-mortgage, we understand that some homeowners are faced with little or no equity in their home. It’s still worthwhile taking some advice. Your current lender may not be your best choice and may not even lend to you.

The mortgage market can be a confusing and daunting prospect. Consumers need help and support when searching for a suitable product. This is where mortgage brokers excel and add value. We are adept at matching a borrower with a lender, potentially saving time and money for both parties.

The busy start to the year reported by estate agents indicates that many first time buyers feel that 2011 is a good time to step onto the property ladder. There are 50% more mortgages where a 10% deposit can be used compared to the same time last year.

Some lenders will even accept part of the deposit being paid by the seller or New Home builder to help people realise the initial down payment they need to buy a property.

Owing to the persistent negativity of the media, many buyers feel that they have few choices. An appointment with Oak Tree Mortgages could help you save money, or take your first steps towards home ownership.

Call us today on 0121 733 8833

Your home may be repossessed if you do not keep up repayments on your mortgage

Oak Tree Mortgages are authorised and regulated by the Financial Services Authority

Tuesday, January 18, 2011

In the BBC series, The Apprentice, Lord Sugar mocked that he didn’t want a “Cautious Carol”. For many, the property market of 2010 was the year of the Cautious Carol.

The election, the long awaited “emergency budget” and concerns about job security all took their toll on Carol’s nerves. Could Carol be a little happier this year?

At Oak Tree Mortgages, we think that 2011 will be a very important year for the economy and the property market. We believe that Cautious Carol has had her day.

With thousands having delayed their house move last year, estate agents are reporting a huge up turn in enquiries.

The National Association of Estate Agents report that out of 700 agencies surveyed, almost two thirds said that the number of house hunters registering in the first two weeks of January was much higher than they would expect for this time of year.

On the supply side, Rightmove reports the number of new sellers is at a two year low.

This mismatch between higher demand and lower supply will, in our opinion, support house prices over the coming months. Within a relatively affluent borough, we believe the fundamentals of the local economy will help support a stable local housing market.

The cost of renting a property continued to rise last year. In some cases, the cost of home ownership compared to renting has almost been equalised. There is still a perception that rent is “dead money”.

Have you noticed how the price of food and petrol has increased over recent months? Inflation currently stands at 3.7%, above the governments target. Higher inflation may be a cost the Bank of England is willing to accept in the short term to support the recovery.

As and when interest rates are increased in Europe, the bank will, we believe, have no choice but to raise the base rate to protect the pound and to prevent further inflation due to the rising cost of imports caused by a weak currency.

If Carol wants to secure a relatively low interest rate on her mortgage, now is the time to do so. The expectation of higher interest rates will soon begin to filter through to higher mortgage rates.

So, Carol, if you have been waiting and waiting for the right time to move, 2011 really could be your year!

If you or Carol would like some advice about your mortgage options, talk to Oak Tree Mortgages.

Call us today on 0121 733 8833

Your home may be repossessed if you do not keep up repayments on your mortgage

Oak Tree Mortgages are authorised and regulated by the Financial Services Authority

Thursday, August 26, 2010

This was the mortgage market prior to the Credit Crunch. Now, fast forward to the present…

A customer needs to be able to prove they can pay. A borrower needs to have a stake in the property they want to buy, they need a deposit! If they have borrowed money before, has this been paid back on time?

The financial services industry has gone back to basics. Does this mean things are simpler?

Lenders are certainly a lot pickier. They decide who to lend to, and there may be strings attached.

On a £100,000 mortgage, an interest rate that is 0.25% cheaper will save around £21 per month. This saving can easily be swallowed up in overpriced insurance premiums sold by the mortgage lender. If you don’t sign up to the lenders insurance, will that jeopardise your mortgage application?

When we go shopping, we usually know what to expect. We have been to the shop before; we can see how long the queue is.

Arranging a mortgage is an alien process for most people. Do you really know if the mortgage lender will process your application quickly? Will delays result in you losing the home you wanted?

Going from lender to lender can be demoralising. The amount a lender will lend based on your salary still varies massively.

For the self employed, will a lender look at the most recent years’ accounts or an average over three years? Did your turnover dip during the recession? How will this impact on the amount you can borrow? How long do you need to have been trading for?

Do you get dejected and give up and fall into a negative mindset, “mortgages are so difficult to get!”

A good adviser can guide you through the different lenders criteria as well as find you a mortgage most suited to your needs and demands.

Not all mortgage lenders are happy to post their mortgage products on comparison websites. Smaller building societies often prefer to channel their mortgages through a select number of professional advisor's rather than be inundated with thousands of applications from websites or customers they have no relationship with.

Lenders are looking for brokers to direct the right type of borrower to them. The broker will have already done the leg work, checking the client fits the criteria. The lender avoids wasting time in processing applications that will be rejected and the borrower avoids the stress of a failed mortgage application.

With the lending landscape having completely changed over the past 4 years, taking good advice has never been more important.

If you would like some advice about your mortgage options, talk to Oak Tree Mortgages. Oak Tree Mortgages are a whole of market mortgage broker. They are not affiliated to an insurance company and do not charge a broker fee.

Call us today on 0121 733 8833

Your home may be repossessed if you do not keep up repayments on your mortgage

Oak Tree Mortgages are authorised and regulated by the Financial Services Authority.